Enhancing supply chain resilience is of vital importance in today’s business to manage and mitigate the risks, especially in the semiconductor industry challenged with intrinsic long cycle times and short product life-cycles. Transferring production from a primary site to an alternative site after a disaster is one of the strategies to ensure resilience of the supply network. In this study, different types of alternative sites with various levels of preparedness are investigated. A discrete-event simulation is used to evaluate their operational and financial impacts under four different disruption scenarios. The simulation outcomes demonstrate unexpected positive benefits of various alternative sites in terms of fast recovery and resilience building.
The world is exposed to all sorts of vulnerabilities and uncertainties. Over the last decades, many unpredictable catastrophes have been witnessed such as earthquakes, computer virus attacks, etc. When disasters occur, supply chains have the tendency to break down, which takes a long time to restore. Massive economic losses from supply chain (SC) disruptions follow. Under this context, supply chain resilience is at the heart of current SC management thinking. Supply chain resilience emphasizes the adaptive capability to absorb the impacts from disruptions, respond to and recover from them. Having resilient supply chains is of vital importance for the semiconductor industry, challenged by a widely spread supply network with long cycle times, short product life-cycles and changing technologies, as well as industries using semiconductors.
Case Study: Recovery Strategies for Alternative Sites
Infineon is a leading semiconductor manufacturer with an agile but complex supply network. The products are manufactured in designated frontend and backend sites. In order to produce particular products in an alternative site, special equipment and technologies are required before the product transfer. This pro-cess is time-consuming, which makes it challenging to use an alternative site following a disaster. A semiconductor fab usually manufactures several technologies, with many products on each of the technologies. For model abstraction we simplified to one technology and few products.
As a result, four different types of alternative sites, i.e., mirror site, hot site, warm site, and cold site, are proposed to enable fast recovery. They are normal operating sites but they have different levels of preparedness for producing specific products. The type of alternative site is PG-specific. From cold site to mirror site, the time to respond after a disruption gets faster because it is ready to use with tools and technologies, etc. Hence one may tend to demand a mirror site for their products. However the limited capacity and expensive investment upfront pose barriers to applying mirror site for all products. A simulation model is developed to assess the overall impacts and their trade-offs.